Argos, the catalog retailer’s Irish arm, has incurred costs of €43.4 million following its decision to close its Irish store network and eliminate 580 jobs earlier this year.
Argos closed its operations in the Republic of Ireland in June last year after concluding that the investment required to make it profitable was too large to be viable.
Now, a new report filed by Argos Distributors (Ireland) Ltd has revealed details of the costs to the company of its decision to withdraw from the Republic.
Closing costs of €43.4 million have been recognized for new accounts, with the largest component being redundancy costs of €23.2 million.
Eligible workers will be offered an ‘enhanced redundancy package’, meaning they will receive an additional four weeks’ pay per year of service on top of the statutory redundancy requirement, with the total redundancy package offered being This is 6 weeks salary per year.
A small number of staff who were not eligible for redundancy under Irish law were offered a one-off goodwill payment.
The costs of 43 million euros also include closure provisions of 7.03 million euros, write-downs of leased assets of 9.8 million euros, write-downs of property, plant and equipment of 1.6 million euros, and consulting costs of 1.73 million euros.
The costs caused the company, owned by UK-based J Sainsbury plc, to post a pre-tax loss of €24.1 million in the 12 months to end 4 March, compared with a pre-tax loss of €13.06 million. That’s almost twice as much. Losses recorded in the previous year.
This year’s losses would have been higher, but the company sold its investment in Home Retail Group (Finance) LLP to Argos Ltd for €227 million in the same year, posting a profit of €29.96 million.
Home Retail Group (Finance) LLP operates primarily as a lending and investment holding business.
In the same year, revenue for the Irish Argos division decreased by €12.8 million, or 9.5%, from €133.76 million to €120.95 million, as the number of stores operating decreased from 35 to 34.
In June last year, the number of stores still open reached a total of 30, with directors saying the last store had closed for the last time on June 24 and that “negotiations to terminate the lease were ongoing. , the lease agreement continues until the end of the term.”
As the company plans to cease trading and ultimately wind down, it is “currently addressing its outstanding legal and regulatory obligations as part of the wind down process”, they said.
“The company continues to settle its remaining debts and collect outstanding receivable balances,” the directors added.
Last year, personnel costs decreased from €16.2 million to €14.48 million, as the number of employees decreased from 754 to 612 (450 part-time and 162 full-time).
This loss also takes into account non-cash depreciation and amortization of €3.22 million. As of March 4, shareholder funds most recently totaled 215.77 million euros, offset by a called-up share capital of 226.4 million euros and accumulated losses of 10.4 million euros.
Cash funding for the business decreased from €3.3 million to €2.57 million.